Software Firms Find Tax Advantages

Expanding use of cloud computing to deliver software as a service is making it easier for global software companies to earn and keep profits outside the reach of U.S. taxes.

VMware Inc. has cut its federal tax bill in the past three years because the company conducts the majority of its international business through Ireland. For the three-year period ended in 2011, the company's tax bill fell despite its revenue rising 86% and its...